Halifax 10% Regular Savings Account

MSE_Martin · 8 June 2005 at 2:36PM

The following is the announcement from Halifax about its new savings account. The product launches next week. I will be updating the childrens and regular savings articles with the deails, in the meantime here is the press release.

IMPORTANT! REMEMBER THE FOLLOWING IS WRITTEN BY HALIFAX TO SELL THE PRODUCT, SO PINCH OF SALT ANY CLAIMS THOUGH THE PRODUCT FACTS ARE CORRECT!

_________________________

Halifax Launches 10% Savings Rate Account

Halifax, the UK's number 1 children's savings provider, with 5 million accounts, today announces the launch of Halifax Children's Regular Saver. The account will be launched on 13th June 2005, offering customers, who save between £10 and £100 every month, a fixed rate of 10% Gross on their savings for a year.

The Halifax Strategy

Halifax's strategy, of encouraging people to save again, has been very successful. Since its launch, just over 12 months ago, customers have opened over 370,000 Halifax Regular Saver accounts, saving on average £170 a month. This new account addresses another important segment of the savings market – adults wishing to save for children on a regular basis.
According to new research conducted for Halifax by BMRB, 54 per cent of adults with children or grandchildren are concerned about key expenditure, like the child's education or a deposit on a first home for them. Yet, just under two-thirds of adults (63%) save nothing on behalf of their children, grandchildren or other relatives and godchildren.

The research also found that of those adults that do save for children, three quarters (73%) save monthly or more often, with almost 9 out of 10 regular savers saving £100 or less each month per child. This profile fits well with the customers' ability to save between £10 and £100 in the Children's Regular Saver account.

Key Features of Children's Regular Saver:
• 10% Gross interest, fixed for a year.
• Deposit between £10 and £100 each month by standing order from a bank account every month. Deposits can be varied month to month within these amounts.
• Open to new and existing customers, with one account per adult on behalf of each child.
• Each year the capital and interest are swept into either a Halifax save4it, a "Best Buy" account, or an existing Halifax savings account held by the adult on the child's behalf. The Children's Regular Saver account then remains open and deposits can continue to be made.
• If the account is closed early, the rate of interest will be at the save4it rate – (currently 5.05% Gross) for the period of investment.
• Children will be able to receive gross interest following registration by a parent/guardian.
• Unlike some other banks, customers are not obliged to take a low interest current account in order to open Halifax Children's Regular Saver.
Children's Regular Saver complements the existing children's savings accounts Halifax offers; in particular, save4it and Halifax Monthly Saver.
For those children who are eligible for Child Trust Fund Accounts, Children's Regular Saver provides an opportunity for parents or family to invest to the maximum £1,200 in a Child Trust Fund, such as Halifax Stocks and Shares Child Trust Fund, each year. The new account is also ideal for those whose children are ineligible for a Child Trust fund account but wish to save regularly for them.

Cheryl Millington, head of savings at Halifax, said:

"Bringing up children is more and more expensive. So, the most effective way to meet those costs is to start early and plan ahead. Children's Regular Saver makes regular saving for a child's future available to everyone by paying the best rate available on even small monthly deposits."

hammodt · 8 June 2005 at 7:50PM

Hi.

Very interesting. Shame it isn't avaliable to us adults

Where do you find these press releases Martin? Are there any sites listing these kind of press releases, or do you just have to go to the Halifax website?

David

Midas · 8 June 2005 at 9:51PM

This story was reported in the Daily Telegraph today, so it is being publicised. They'll probably advertise it more widely in the next week or two.

MSE_Martin · 9 June 2005 at 4:52PM

The press releases can be on the websites - but generally they are sent directly to journalists (sometimes different journo's get at different times). There is also a special wesbite only PF journalists can access to get certain press releases.

I get hundreds most are boring, but if some are useful i will keep throwing them in here. IN this case i knew this on monday - but it was embargo'd till wed (ie thats the earlier you can report it - you can of course break the embargo, but do that and you never get anything in advance again, which makes writing on it more difficult)

jo_b_2 · 9 June 2005 at 10:01PM

Made an appointment today to go and open a Regular savings account at the Halifax next week.

Then I can cancel the A+L First Save account.

mary · 10 June 2005 at 8:22AM

Have just moved from A & L to Halifax Save4it, with a couple of grand saved over the years for the youngest two from birthday money, etc.

Passing thought, I wonder what's to stop you taking the kids down to the Halifax once a month, withdrawing some of their own money already saved in the 5.05%, and then putting it into the new 10% account by STO. Just simply recycyling their money for double the rate?

Am I missing something? Or maybe better to wait until the full instructions are out.

sneekymum · 10 June 2005 at 9:01AM

Don't get too excited - MoneyMail mentioned this in the editor's "Comment"-

If you invest the maximum £1200 over the year that this runs you won't be getting £120 in interest.

The first month's £100 does earn you £10 - but the last month's only gets 82p.
The most interest this account can make (remember it only lasts a year at 10%) is £62.

The the real interest rate - the AER - is 6.2%. - which is not bad for regular savers, but after a year it will switch to another rate and you may want to move.

If investing there each month requires a special journey then the extra £10 made over an internet account (registered to receive interest gross if its for a child) may not be worth the bother...

sexy_fufu · 10 June 2005 at 2:09PM

Sneeky how have you come up with those figures........

sneekymum · 10 June 2005 at 2:36PM

£100 @ 12 months of 10% is £10
+ £100 @ 11 months of 10% is £9.17
+ £100 @ 10 months of 10% is £8.33
+ £100 @ 9 months .......
etc

= £65 - I get it to - still .........not 10%

Perhaps £62 reflects the inevitable delay in processing all those new applications the first week it runs.

Twopints · 10 June 2005 at 3:05PM

It is 10%.

You just do not have all of the £1200 in on day 1. The AER probably slightly higher i.e. 10.1 %. On average throughout the year you have £650 in the account therefore at 10% it equates to £65

All of the money in the account earns 10% from the day it is in the account .

If you have £1200, you can put £100 a month into this account where it will earn a total of £62-ish over the year. But, in month 1, you still have £1100 somewhere else. Assuming this is in a best-buy savings account it will be earning 5% ( obviously on a reduced amount each month) in addition to the interest being earned at 10% in the Halifax. This will earn another approx £30 interest. So about £90 in total giving an approx return of 7.5% (ignoring tax).

Innys · 10 June 2005 at 3:34PM

Twopints is correct. It is 10%.

It is similar to my Abbey regular saver. I put in £100 per month and get 7% over the year. That £100 comes from my wages which is not acually mine until the 1st of each month. Therefore, technically, I am investing money which isn't actually mine until shortly before it needs to be sent to Abbey.

However, the interest received isn't 7% on £1200. It's 7% on £600 which is the average balance over the period.

This logic is the same for the Halifax deal.

Halifax 10% Regular Savings Account

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